That just made me confused what is my taxable income. And what do you mean reduces my tax? What tax do i have ive already payed my taxes all year? I thought fileing my income tax was me getting money back from taxes ive payed.

You have had taxes withheld during the year, but they don't get "paid" until you file your tax return. To determine how much your tax is, your income is totaled, that is called your adjusted gross income, then your personal and dependent exemptions are subtracted from AGI, as is your Standard or Itemized deductions. What is left is called your taxable income. The tax on that is determined from the IRS tax tables. If the tax for your income is less than the tax that you paid through the year, you get a refund. If the tax for your income is more than the tax that you paid through the year, then you owe more.